Where there is a disposition of taxable Canadian property by a non-resident acting solely as nominee for the beneficial owner, who is a Canadian resident, is a s. 116 certificate required? CRA responded;
In this situation, the CRA recognizes that the beneficial vendor is resident in Canada. Consequently, subsections 116(1) and 116(3), which apply to dispositions of taxable Canadian property by a non-resident, will generally not apply. That is because the vendor is resident in Canada, whereas the nominee is not legally the owner of the property being disposed of.
It should also be noted that, in certain cases, the CRA could issue a letter to the taxpayer confirming that it is not necessary to withhold tax or to obtain a certificate of compliance under section 116, thereby recognizing the legal effect of a counter letter, provided the conditions set out in question (a) are satisfied [regarding disclosure and effectiveness of the counter letter].